Editor’s Note: Dennis Fassett is a former corporate finance executive turned real estate investing “Cash Flow Mercenary.” Dennis specializes in single-family and multi-family cash flow properties and thoroughly enjoys assisting his fellow investors with their own strategies, including how to buy your first apartment building.
As an ongoing contributor to Mogul’s “Market News Updates,” Mr. Fassett provides us with his own unique, lively, and thought-provoking commentary on the timely industry news and events of today that are impacting our industry. And be sure to check out his other super-helpful Market News Updates. For now, enjoy...
From Dennis Fassett, Cash Flow Mercenary...
I was excited when I read this headline:
Here are 5 tips on how to adapt to the changes
Excited because I know far too many real estate investors who use a cookie-cutter approach with everyone they deal with.
I’m somewhat guilty of doing that myself. It was just a couple of years ago that I started using text messages for business. I steadfastly refused for a long time, and insisted on – gasp! – actual phone calls, before a colleague of mine several years older than me told me to get with the program and stop calling him.
So I was looking forward to the author’s take on dealing with a more mobile populace, not just the workforce.
Boy was I disappointed.
He started strong by writing that:
“…the population of mobile workers in the United States is expected to swell from 96.2 million in 2015 to 105.4 million in 2020. That will represent nearly three-quarters of the U.S. workforce.”
And then he jumped to:
“…mobile workers use mobile technology to do their jobs, just like they use it in other areas of their lives, from ordering takeout to house hunting…”
Leading to his “brilliant” conclusion that:
“By understanding how these factors come into play when mobile workers set out to buy a house, real estate investors can sell homes faster and at higher prices.”
Well, yes. Conceptually, I suppose that’s true, but do you know what his 5 pretty much idiotic “factors” were?
#1: Be More Social
And his great advice?
“…people are always ‘on,’ always connected. Keep this in mind when marketing your property. …use Trulia, Zillow, Realtor.com, and Redfin for your home listing, but also share the information in relevant Facebook communities…”
Oh, and he also wrote:
“The mobile workforce uses technology such as iPads and smartphones to do their jobs, and they transition easily to house hunting on these devices.”
Great! I think. How this is relevant to anything, I don’t know. Nor did he say.
#2 Reach Beyond State Borders for Buyers
I don’t think Captain Obvious really gets Realtor.com...
His earth shattering recommendation:
“Help encourage a sale to relocating homeowners by providing them not only with information about the property, but tips about local restaurants, school districts, job opportunities, and cultural attractions as well.”
#3: Keep Key Selling Points in Mind
This one left me slack-jawed.
This is what he wrote, I kid you not:
“If there’s one thing most people expect wherever they put down roots, it’s the availability of a strong Internet connection.”
Funny, but when I was looking to buy my first home, and then when I traded up to the second, I guarantee you that “a strong internet connection” was not on the list.
#4: Consider Unconventional Financing
Mr. Brilliant Author makes a valid point about the challenges that an on-the-move workforce presents, particularly in the area of financing.
Successful freelancers or high-tech entrepreneurs may not have the predictable salary history that banks love. A mobile worker may have moved frequently to pursue better jobs, resulting in what may appear to be an unstable job history or gaps in employment.
So what “unconventional” financing methods does he advocate?
Lease Options and Seller Financing. That’s his brilliant solution.
#5 Don’t Expect Them to Stay
Yes, a mobile workforce is more transient than a more traditional workforce. We get that. His recommendation is for you to “adjust your investing strategy…”
“Instead of flipping your property, you might consider keeping it to rent. For a workforce on the go, renting a house offers a short-term way to establish a household and take roots in a community without the commitment of homeownership.”
This guy clearly has no clue what investors do. He was hard to follow and not much of his “advice” made sense.
My Take?
I have two take-aways regarding the mobile workforce and real estate investing:
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We need to adapt to what’s happening in the market. We need to look at trends and be prepared for where the market is moving and what it’s doing,
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My take on dealing with ANYONE in my real estate investing business, including those in the “mobile workforce” is simple: It’s “follow their lead.”
Follow their lead means that if they want to communicate via text, then I text them. They want to use email? Fine with me. They want to do everything online and not attend the closing? Awesome.
I just did a deal where the elderly seller and I faxed letters back and forth to each other. Yep, faxed. I don’t care – as long as it results in a check… I have a lot of flexibility to offer.
And you should, too.
Spill It
So, what’s your take? Share with us in the comments section below.
Dennis Fassett
earned a BS in Economics and followed that up with an MBA in finance. After working and corporate finance and banking for several years, he started buying single family houses, and quickly built a very nice portfolio of cash flowing rentals. When the credit markets started to dry up and he couldn’t get any additional single family mortgages he shifted his focus to apartment buildings. He now has over $3 million in rental real estate. He manages most of it his self and still has a day job. Dennis has even created his own Private Equity fund to buy apartment buildings.